Live Updates > Live Update Details
2025-10-31 20:34:01
[MBS Opening: Sharp Yield Surge Widens Spreads, Market Under Pressure Ahead of Month-End Index Buying] ⑴ At the opening on October 31, US Treasury yields were bear-steeping, with the 10-year yield rising to 4.105% and the 2s/10s yield widening by 1.1bp to 48.6bp. The MBS basis slightly underperformed, with the UMBS30 yield at 5.0%-6.0% 1-2 ticks lower than the 10-year yield. ⑵ On the 31st day of the government shutdown, the Q3 employment cost index and the September core PCE were absent, leaving only the Chicago PMI and speeches from three non-voting Fed officials. Market volatility was supported by sentiment. ⑶ Crude oil fell 0.3% to $60.38, pressured by expectations of increased OPEC+ production in December coupled with a demand-side uncertainty. (4) End-of-month buying interest in index futures has not materialized. The current 30-year bond yield is 5.163%, widening the spread between it and the 10-year mixed government bond yield to 124.7bp, and the spread between it and the 10-year SOFR yield to 149.2bp, indicating pre-emptive pressure of 1bp. (5) Next week's focus: The Supreme Court will hear on Tuesday regarding Trump's tariff statements; October MBS prepayment data will be released starting Thursday evening; Class A rolls will settle on Friday, amplifying volatility and convexity trading.
